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Perfect Plan For Your Sunset Years

If you are young & life hasn’t imposed certain clamps on you, chances are the last thing on your mind is the management of your income across savings, investments or other jargon laden financial products. Several studies about millennial have already pointed out that savings are falling, there is a bias towards living the present – and there is a high incidence of debt, being born from what is called the ‘invincibility complex’. When we are doing well, there is little urgency to plan for a time where we may not be doing so great.

While there is need for further research on how this behavior can be affected positively for the sake of a financial stability for all, it is even more important to simplify the challenges for everyone to understand.

The greatest challenge we face as we inch closer to become sextagenarians is that our productivity goes down, however there is little that says that our will to live also goes down – in fact our need to live becomes stronger, we need more medicines, vacations & generosity for our little ones. This challenge is addressed by several products in the market that ensure that a wise investor can secure for himself or a herself a lifelong steady income, especially in the last phase of life. Even when such financial products exist they are unable to create an appeal for everybody because none of these solutions are bespoke. In some cases there are clamps on when & how you can invest, in others the rate of return is dependent on market conditions at the time you are expecting returns.

What we have with a plan like HDFC Life Pension Guaranteed Plan is an opportunity to overcome the barriers that stop younger people from considering such products. Here are 5 things that become serious factors when locking in on such a plan.

1. Guarantee your retirement income: A lot of people end up with an uncertain financial future post retirement because they fail to plan at the right time. If you decide to plan 3 years before you stop working, it will be a futile exercise. Plan now, whether you are 10 or 30 years away from retirement, to ensure a lifelong regular income. The sooner you make this investment, the higher your returns will be. Securing an income source post retirement is a must and instruments like the HDFC Life Pension Guaranteed Plan allow you to even fix the rate of return.

2. Planning for your spouse: Retirement plans extend benefits to couples who invest together by ensuring continued payouts for both partners even in the unfortunate event of either passing away. As much as a retirement is about being able to relax and spend time with family, it’s also important to have your family in a financially relaxed state.

3. Choosing a flexible plan: While planning, it is essential to choose a plan that offers flexibility in the terms of payment & returns. That’s because when you’re younger, you may be able to pay at one go every year, but as expenses mount with children, etc., you may need greater flexibility in your payments. So, it’s a wise move to choose a flexible plan such as this.

4. Securing guarantees even when there are none: A secure plan locks in on your rate of return at your present day, irrespective of what the economy might be like at the time of maturity. Not only that, a product like the HDFC Life Pension Guaranteed Plan also gives you the option to terminate your investment to get access to your money during any emergency.

5. Selecting a plan that matches your lifestyle: While you may wisely choose a retirement plan that suits your lifestyle at start of your career, by the time you are approaching the apex, you may want to upgrade to increase your potential payouts. Hence, you should choose an annuity plan which provides the ability to increase annuity payouts through top-ups.